Incentives can be a powerful motivator in the workplace, driving employee performance, and fostering a culture of engagement. However, when it comes to safety, traditional incentive structures – like cash bonuses tied to lag indicators – may have unintended, potentially harmful, consequences.
Consider an experience shared by a veteran Project Health and Safety Advisor in New Zealand. A few years ago, one of his team members had a fall on some stairs, resulting in a ruptured Anterior Cruciate Ligament (ACL) - a serious knee injury. Instead of a primary concern for the injured worker's well-being, an immediate push for his return to work was spurred, not for the individual's benefit, but for maintaining the company's safety record.
The harsh reality of skewed priorities was starkly unveiled in a conversation with a higher-up safety manager. Once it became clear that the injured worker couldn't return to work the next day, the manager's response was a grim, "f***, that's our bonus gone!". This episode offers a troubling glimpse into a system where financial incentives seem to eclipse the very essence of safety - the health and well-being of the workforce.
The Problem with Current Safety Incentives
A recent paper titled "Rewarding safety performance: Improving safety or maintaining beliefs?"1 published in Safety Science casts a spotlight on the link between annual cash bonuses and safety metrics in the oil and gas industry. Authored by Fawaz K. Bitar, Diane Chadwick-Jones, Robert J. de Boer, Marcin Nazaruk, and Matthew Lawrie, the study explores employees' comprehension of this link, its influence on safety operations, and their suggestions to enhance its efficacy.
Understanding the Complexity of Cash Bonuses
The researchers conducted semi-structured interviews with 48 employees, unveiling a fascinating dichotomy. Despite the established belief that annual cash bonuses serve as an effective method to encourage safety improvement, a substantial proportion of frontline employees don't fully understand how their safety performance translates into their annual bonus.
This communication gap, attributed largely to management's inefficacy in elucidating how safety metrics are measured and related to bonus payments, leads to a cloud of uncertainty and perceptions of unfairness. For instance, some employees expressed that the bonus scheme disregards factors beyond their control, like adverse weather conditions or equipment failures, leading to feelings of dissatisfaction and potential disengagement.
Additionally, the researchers noticed regional disparities in the comprehension of the link between annual cash bonuses and safety metrics. Employees in regions with higher levels of economic development were found to have a superior understanding of this link, as compared to those in less developed regions. This finding hints at the role regulatory frameworks and economic development may play in molding employee perceptions of safety incentives.
Under-reporting and Misaligned Incentives
While the majority of the interviewed employees believed in the potential effectiveness of cash bonuses for safety improvement, they also provided suggestions to boost the existing system. They called for more frequent feedback on safety performance, improved transparency in bonus payments, and a more balanced approach in calculating bonuses that takes into account factors beyond their immediate control. Despite these recommendations, there is a lingering concern about whether cash bonuses for lag indicators may inadvertently incentivize under-reporting of safety incidents.
LinkedIn Discussion: Industry Insights
In a LinkedIn discussion initiated by psychologist and author Clive Lloyd, professionals from various industries weighed in on this debate. Lloyd succinctly captured the concerns about cash bonuses for lag indicators, remarking, "cash bonuses for lag indicators tend to incentivize non-reporting - just stop it! Quoting the aforementioned paper, Lloyd continued, 'There is strong evidence for a negative impact on incident reporting'".
His sentiments were echoed by several others in the LinkedIn thread, highlighting the fundamental issue – the misalignment between the intended positive effect of incentivizing safety and the potential adverse outcomes, like under-reporting or ignoring safety incidents to maintain bonus eligibility.
The Experts' Take: Cash Bonuses vs Safety Reporting
A sustainable safety culture requires a fundamental shift in how we incentivize safety performance, focusing on lead indicators rather than lag indicators. One pioneering solution is Scratchie, an innovative platform redefining safety incentives. In the next section, we will explore how Scratchie is poised to bring out the positive potential of incentives, without the downsides indicated in this paper.
Scratchie: The New Chapter in Safety Incentives
Scratchie, an innovative app hailing from Australia, is steering the safety conversation in a new, constructive direction. Designed to augment safety in industries like construction, manufacturing, healthcare, and beyond, Scratchie motivates safer behaviours by issuing immediate, on-the-spot rewards.
Co-founded by veterans of the construction industry, Scratchie was born from the recognition of a persistent issue: Traditional safety incentives were simply not delivering the desired results. They saw a need for a platform that not only rewards safe behaviour but also instils a positive safety culture within the workforce. This vision led to Scratchie, a tool that perfectly complements existing safety systems while adding a fresh, engaging layer to safety protocols.
How Scratchie Works: Incentivizing Proactive Safety Measures
Unlike conventional cash bonuses tied to lag indicators, Scratchie's rewards system is built on lead indicators – proactive, preventative safety measures that workers take. This empowers organizations to emphasize and reward actions like keeping a workspace tidy, filling out Safe Work Method Statements diligently, or efficiently safeguarding against falls, fostering a proactive safety culture.
Transparency and Fairness: Cornerstones of Scratchie's System
When a supervisor notices such safety-positive behaviours, they simply open the Scratchie app and select an appropriate category for the award. A QR code is generated and scanned by the worker, culminating in a randomized award. This element of gamification not only amplifies the sense of fairness (a crucial component, as identified in the aforementioned paper) but also creates an element of excitement and positive reinforcement around safety behaviours.
Shining a Light on Safety Performances
Scratchie's approach is already making an impact. Recent surveys show that Scratchie has improved safety attitudes on site by an impressive 28%, and a resounding 96% of workers prefer to work on Scratchie sites. This feedback is a testament to Scratchie's potential in revolutionizing safety incentives and fostering a culture of proactive safety.
The Benefits of a Scratchie-driven Safety Culture
Moreover, Scratchie brings in a level of transparency that's often missing in traditional incentive systems. The app keeps a record of who received an award, for what behaviour, and from whom. By making this data available to the entire team, Scratchie helps mitigate potential issues related to under-reporting or selective reporting of safety incidents, fostering a culture of accountability and shared responsibility.
From Lagging Indicators to Lead Indicators: The Shift in Safety Culture
By focusing on lead indicators and immediate, positive reinforcement, Scratchie turns the traditional safety incentive model on its head. Instead of dangling a potential cash bonus at the end of the year (a lag indicator-based approach), Scratchie encourages and rewards proactive safety behaviours here and now. It places power back in the hands of the workers, making safety not a management-imposed requirement, but a shared responsibility that's acknowledged, appreciated, and rewarded.
Conclusion: The Future of Safety Incentives
While rewarding safety is a critical component of fostering a culture of safety, it's important to ensure that it's done right. Scratchie provides a fresh, forward-thinking solution, empowering workers, supervisors, and management alike to prioritize safety and promote positive behaviours. As the conversation on safety incentives continues to evolve, adopting an approach that focuses on lead indicators, positive reinforcement, and transparency, as Scratchie does, could just be the key to avoiding potential disasters and truly creating safer workplaces.
How might organizations improve communication and transparency regarding safety metrics and bonus calculations to ensure better understanding among employees?
Organizations could establish regular, open dialogues about safety performance metrics, and how they relate to bonus calculations. This might involve workshops, seminars, or simply clearer guidelines. Also, it could be beneficial to provide employees with individualized feedback on their own safety performance and how it affects their potential bonuses.
Given the finding that employees in regions with higher economic development have a better understanding of safety incentives, what strategies might be effective in less economically developed regions?
Strategies could include increased investment in safety training and education, the introduction of more transparent and easily understood bonus schemes, and efforts to build a stronger culture of safety within organizations.
What are the potential implications for organizations that incentivize safety performance based on lagging indicators, as suggested by Clive Lloyd and other discussion participants?
Incentivizing safety performance based on lagging indicators can lead to non-reporting of incidents and an overall misrepresentation of an organization's safety culture. This can potentially lead to safety hazards not being addressed properly and could result in serious harm to workers.
How do experiences shared by industry professionals like Susan Mends and Andy Bunyan underline the need for a change in the current bonus system for safety performance?
Their experiences illustrate the dangers of incentivizing safety based on lagging indicators. These systems can create a toxic work environment where the well-being of employees is secondary to the achievement of safety bonuses. This further reinforces the need for a more proactive and fair system of safety incentives.
Given that Scratchie uses a gamified system for rewarding safe behavior, how does this contribute to enhancing the safety culture within an organization?
Scratchie's gamified system rewards proactive safe behavior immediately, which has been shown to be more effective for behavior change. The randomness of the award amount and the transparency of the award details help to ensure fairness, contributing to a more positive safety culture. Also, by involving everyone in safety practices, Scratchie fosters a culture where safety becomes a shared responsibility.
1 Bitar, F.K., Chadwick-Jones, D., de Boer, R.J., Nazaruk, M. and Lawrie, M., 2022. Rewarding safety performance: Improving safety or maintaining beliefs? Safety Science, 154.